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June 17 EST: Coinbase is asking regulators for the green light to do something no major U.S. exchange has done before: offer stocks as blockchain-based tokens. The proposal, now in front of the Securities and Exchange Commission, would allow Coinbase to list so-called “tokenized equities” — digital versions of public company shares that live on-chain, not on Wall Street’s aging back-end systems.
The application isn’t just a crypto novelty. It’s a direct challenge to the likes of Robinhood and Charles Schwab, and a signal that Coinbase wants a bigger role in how mainstream assets get traded in the digital age.
A Shot Across the Bow of Traditional Brokers
Tokenized equities are essentially digital stand-ins for stocks. Each token represents one share, but instead of sitting in a brokerage account tied to legacy infrastructure, it lives on a blockchain ledger. That opens up 24/7 trading, near-instant settlement, and theoretically, fewer intermediaries taking a cut.
For Coinbase, this isn’t just an experiment. It’s a path toward grabbing market share from retail brokerages that still operate on 9-to-5 hours and multi-day settlement cycles. If they pull it off, it’s not just the crypto curious who’ll care. Any investor frustrated by the limits of the current system could take a look.
But to do this legally, Coinbase needs a “no-action letter” or exemptive relief from the SEC — regulatory tools that say, in effect, “We won’t stop you.” It’s a workaround for the fact that Coinbase isn’t a registered broker-dealer, and technically, offering stocks to U.S. users without that status isn’t allowed.
Regulatory Winds Are Shifting
Timing is everything. A year ago, this pitch might have gone nowhere. The SEC was in court with Coinbase, accusing the exchange of operating as an unlicensed broker. That case was dropped earlier this year after a leadership change at the agency. Since then, regulators have signaled a softer approach toward crypto, including launching a task force to sketch out new rules for digital assets.
That doesn’t mean approval is guaranteed. But the environment is friendlier — or at least more open to negotiation.
Coinbase’s move is part regulatory trial balloon, part market signal. It’s testing whether the U.S. is finally ready to accept that blockchain rails aren’t just for coins and NFTs. They can run real assets too — including some of the most tightly regulated financial instruments in the world.
The Infrastructure Still Has Gaps
There’s a reason no one’s pulled this off in the U.S. before. The concept is clean, but the execution gets messy. For tokenized stocks to work, you need standards, market makers, and custody infrastructure that can handle both digital and traditional compliance. Right now, most of that is still being built.
Liquidity is another problem. It doesn’t matter if a token trades 24/7 if no one’s on the other side of the trade. And while the tech enables faster settlement, regulators aren’t always comfortable when their oversight tools don’t apply neatly.
But if the SEC gives Coinbase the green light, even in limited form, it could start a chain reaction. Other exchanges — both in crypto and traditional finance — would almost certainly follow with their own applications. Tokenized finance has been stuck in a proof-of-concept phase for years. This could be its move to production.
The Stakes Are Higher Than They Look
Coinbase’s ask comes at a pivotal moment not just for the company, but for the financial system. The stock market hasn’t changed much in decades, at least under the hood. Settlement still takes days. Trading still stops on weekends. Tokenization fixes that — not in theory, but in practice.
If Coinbase gets this through, it won’t just be another crypto product. It’ll be a blueprint for what a post-brokerage world could look like. And for the legacy players still living off payment for order flow and custodial margins, that should be a wake-up call.
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